Gentiva Board Member's Shares Magically Grow

StrangeTony,

SEC filings show Gentiva Board member Robert Forman's stock holdings increased by roughly 28,000 shares with no declared activity.  His September filing showed holdings of 43,938 shares.  This rose to 71,538 shares in a December 23rd filing.  How does that happen with no filing in between?  Something's missing or amiss.

Anonymous (from Gentiva)

Slusser Latest to Exercise Executive Options

StrangeTony,

Gentiva Chief Financial Officer Eric Slusser exercised his stock options for a profit of $760,000.  His remaining stock holdings are valued at $4.6 million. Susser's stock option sale occurred nearly two weeks after a number of Gentiva leaders.  This wait cost Slusser over 25 cents per share in proceeds.  He left over $22,000 on the table.  How many Gentiva employees work for a year for that level of pay?  I bet that number would fill a lot of buses.

Also, the buyout vote for Gentiva shareholders will occur on Thursday, January 15, 2015. It will take a Gentiva wreck for the deal to not go through.

Anonymous (from Gentiva)

Chairman of Fun Exercises Options

StrangeTony,

Gentiva Executive Chairman Rod Windley became the latest senior leader to exercise stock options prior to selling their company to Kindred Healthcare.  Windley stands to nearly double his money given an option purchase price of $10.24 per share and a quick flip sale at $19.05.  It's an 86% return at those prices.

Windley still holds over 515,000 shares of Gentiva stock worth over $9.8 million.  That will buy a lot of future fun.  Meanwhile the company cut its health insurance contribution for 2015.  That could mean much misery for employees living on the margin. 

Anonymous (from Gentiva)

Kindred's December Debt Offering

StrangeTony,

Kindred's SEC filing stated the company will float unsecured debt as part of its financing of its Gentiva purchase:

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced that it proposes to offer, subject to market and other conditions, $1.35 billion of senior unsecured notes (the “Notes”) to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-United States persons in offshore transactions. 

The actual terms of the Notes, including interest rate, principal amount and maturity, will be determined at the time of pricing. The Notes are expected initially to be issued by Kindred’s subsidiary, Kindred Escrow Corp. II.

Qualified institutional buyers, offshore transactions, Kindred Escrow Corp. II?  This is high finance, levered healthcare priced at premium levels, 8% and 8.75%. 

Kindred's debt is expected to be sold by December 18th, one week before Christmas.  It's nearly the shortest day of the year, the one with the least light.  It's fitting. 


Anonymous (from Gentiva)  

Too Big to Care

StrangeTony,

The business of hospice keeps getting bigger.  Bloomberg reported Kindred Healthcare shortened the maturity on $1.35 billion in junk bonds the company will use to acquire Gentiva.  Higher interest rates and shorter maturities are needed to push speculative grade debt.

NASDAQ reported "The notes will be issued in two tranches of $750 million of 8.00 percent senior notes due 2020 at an issue price of 100 percent and $600 million of 8.75 percent senior notes due 2023 at an issue price of 100 percent."

That's $112.5 million in annual interest expenses for this twin set of bonds.  Bloomberg did not say how the principal is paid back, in annual installments or a lump sum at maturity.  Kindred will float the bonds in two parts.  One will have a five year maturity and the other eight years.

Pressure on individual hospices should escalate from higher interest rates, increased overhead and cash needs, including a corporate building expansion.  The Courier Journal reported "Kindred Healthcare is planning a $39.5 million expansion of its headquarters along Fourth Street at Broadway, adding up to 500 additional employees over perhaps three years.'

'Kindred officials were joined by Gov. Steve Beshear and Mayor Greg Fischer Thursday afternoon at Theater Square to announce the new jobs and the construction, after the state Economic Development Finance Authority reviewed a set of $11 million in state incentives for the expansion earlier in Frankfort."

I hope the State of Kentucky knows about Gentiva's no raises for years, benefit reductions (PTO and health insurance contributions), as well as Kindred's plans to write President Paul Diaz a $6 million check in March.  Someone inside Kindred will benefit from Kentucky taxpayers' generosity.  I don't expect it to trickle down.

However, we will need to fund increased overhead and the next executive incentive pay extravaganza.  Doesn't it warm the cockles of your heart?

Anonymous (from Gentiva)

Stock Option Paydirt for Gentiva Executives

StrangeTony,

Gentiva's executives continued cashing in their stock options.  Here's the payday for December 4th:

 Remaining holdings look like this:

The public should be aware of this public information, especially Gentiva employees who built the value Kindred found in our company. 

Anonymous (from Gentiva)

Gentiva Lawyer Cashes in Options

StrangeTony,

'Tis the season for Gentiva executives to profit in numerous ways.  The first to publicly do so is Gentiva Senior Vice President and General Counsel John Camperlengo.  Mr. Camperlengo exercised five of his stock options, spending just over $1.4 million for 150,000 shares.  He sold two thirds of these new shares, roughly 100,000 shares at $19.22 per share.  His total proceeds from the sale were over $2 million. 

Camperlengo's new shares cost an average of $9.52 per share, which gave John $9.70 profit per share.  That's an instant 102% profit.  After his $570,000 payday Mr. Camperlengo still owns nearly 170,000 shares of Gentiva stock worth $3.2 million.

Cashing in vested options is but one financial plum on the Gentiva senior leader Christmas Tree.  I expect many more financial presents, including the $10 million executive bonus. 

Meanwhile, executive communications to employees have grown silent.  The again, management's actions have consistently put employee relations into the afterthought category.  Gentiva executives must have investment possibilities and uses for millions in cash dancing in their heads.  

Anonymous (from Gentiva)